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FIgURE IV.17: Russia trade in services — RCA index in 2009
Transportation
Personal, cultural and recreational
Travel
Communication
3.0
Chapter IV — International competitiveness of EU industry
2.5
2.0
1.5
1.0
0.5
Other business services Insurance
Computer and information
Finance
Construction
Note: The ‘radius 1’ circle is highlighted to aid identification of those sectors with a comparative advantage, which are located outside
the circle.
Source: own calculations using IMF bops.
IV.3 Intra-industry trade
Trade was analysed for broad categories of products in
the previous section. Part of international trade consists
in countries exchanging products (inter‑industry trade)
reflecting relative different factor (labour and capital)
endowments and technology. Countries which are relatively
endowed with capital tend to trade capital intensive goods
in exchange for labour intensive goods from countries
which are relatively well endowed with labour: for example,
pharmaceuticals for textiles or motor cars for food. In
section IV.1, the international trade network was presented
in terms of trade flows between geographic regions.
However, a large proportion of trade comprises exchange
of similar goods between countries which have comparable
levels of income, such as different brands of cars and clothes.
This type of trade, intra‑industry trade (IIT) is explained
by factors such as economies of scale and demand for
differentiated products, rather than by relative factor
endowments. As demand for differentiated products and
varieties of different qualities tend to rise with income,
per capita incomes of countries play an important role in
determining trade patterns.
About 53 % of world trade occurs between countries in
the groups composed of the EU‑27 and other high‑income
countries. If upper‑medium countries are included, this share
rises to almost 70 %. While trade between different types of
countries (e.g. high and upper‑medium income countries on
the one hand and low and low‑medium income countries
on the other) can be expected to involve goods produced
with differences in factor intensities, the exchange of
goods between high‑income countries suggests a different
pattern of trade. However, IIT also involves trade between
high‑income and lower‑income countries as well as between
the lower‑income countries themselves, cf. Table IV.10. 74
74 The classification by income level that was used is the one from
the World Bank. The country groups are: High non‑EU: Australia,
Bahamas, Bahrain, Brunei Darussalam, Canada, Croatia, China,
Hong Kong SAR, Iceland, Israel, Japan, Rep. of Korea, Kuwait, China,
Macao SAR, Oman, Neth. Antilles, New Zealand, Norway, Qatar,
Saudi Arabia, Singapore, Switzerland, United Arab Emirates, USA.
Upper‑medium: Algeria, Argentina, Bosnia Herzegovina, Botswana,
Brazil, Belarus, Chile, Colombia, Costa Rica, Cuba, Dominican Rep.,
Equatorial Guinea, Gabon, Jamaica, Kazakhstan, Lebanon, Libya,
Malaysia, Mauritius, Mexico, Montenegro, Namibia, Panama, Russian
Federation, Serbia, South Africa, Suriname, Trinidad and Tobago,
Turkey, TFYR of Macedonia, Uruguay, Venezuela. Low‑medium:
Albania, Angola, Azerbaijan, Armenia, Bolivia, Belize, Cameroon,
Cape Verde, Sri Lanka, China, Ecuador, El Salvador, Djibouti,
Georgia, Guatemala, Honduras, Indonesia, Iran, Iraq, Côte d’Ivoire,
Jordan, Lesotho, Maldives, Mongolia, Rep. of Moldova, Morocco,
Nicaragua, Nigeria, Paraguay, Peru, Philippines, Timor-Leste, India,
Swaziland, Syria, Thailand, Tunisia, Ukraine, Egypt. Low: Afghanistan,
Bangladesh, Bhutan, Myanmar, Burundi, Cambodia, Central African
Rep., Chad, Comoros, Congo, Dem. Rep. of the Congo, Benin,
Ethiopia, Eritrea, Gambia, Ghana, Guinea, Haiti, Kenya, Dem.
People’s Rep. of Korea, Kyrgyzstan, Lao People’s Dem. Rep., Liberia,
Madagascar, Malawi, Mali, Mauritania, Mozambique, Nepal, Niger,
Pakistan, Guinea-Bissau, Rwanda, Senegal, Sierra Leone, Viet Nam,
Somalia, Zimbabwe, Sudan, Tajikistan, Togo, Uganda, United Rep. of
Tanzania, Burkina Faso, Uzbekistan, Yemen, Zambia.
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